VANCOUVER, Dec. 14, 2023 - Cornish Metals Inc. (TSX-V/AIM: CUSN) ("Cornish Metals" or the "Company"), a mineral exploration and development company focused on advancing the South Crofty tin project to a production decision, located in Cornwall, United Kingdom, is pleased to announce that it has released its unaudited financial statements and management, discussion and analysis ("MD&A") for the nine months ended October 31, 2023. The reports are available under the Company's profile on SEDAR+ (www.sedarplus.ca) and on the Company's website (www.cornishmetals.com).
Highlights for the nine months ended October 31, 2023 and for the period ending December 13, 2023
(All figures expressed in Canadian dollars unless otherwise stated)
Commissioning of the water treatment plant ("WTP") completed at the end of October 2023 with discharge of treated water to the Red River commencing shortly thereafter in accordance with permitted standards (news release dated October 25, 2023);
Good progress is being made on the mine dewatering with the water level falling faster than expected in the first month of dewatering (news release dated December 6, 2023);
Updated Mineral Resource Estimate ("MRE") for South Crofty mine released in September 2023 showing a 31.6% increase to contained tin in the Indicated Mineral Resource category for the Lower Mine (news release dated September 13, 2023);
Drill program to collect samples for metallurgical testwork as part of the South Crofty Feasibility Study completed in June 2023 with assay results reported (news release dated July 3, 2023);
Ore sorting testwork completed with excellent results: 55% mass rejection with less than 3% metal loss (XRT: -50mm to +15mm size fraction) and 50% mass rejection with less than 5% metal loss (HLS: -15mm to +0.85mm size fraction) (news release dated October 8, 2023);
Metallurgical testwork results confirm the potential to upgrade the mineralization of the South Crofty mine and enable process design optimization work on the size of the mineral processing plant (news release dated October 8, 2023);
Two submersible pumps installed in New Cook's Kitchen ("NCK") shaft with the pumps and variable speed drives successfully commissioned in July 2023 (news releases dated June 26, 2023 and July 18, 2023);
Fifteen-month power supply contract agreed for the provision of 100% renewably generated power thereby providing certainty over power costs during the mine dewatering phase (news release dated July 18, 2023);
Two single drum winders for the shaft re-access delivered to site by early November 2023 with their installation underway;
Remedial work underway on the south headframe above NCK shaft and the winder building in readiness for the installation of the main winder;
Work on the Feasibility Study continues and is well underway, and
Commencement of follow-up exploration drill program at the Wide Formation target in the Carn Brea exploration area (news release dated September 19, 2023).
Richard Williams, CEO of Cornish Metals, stated, "Looking back on 2023, I want to commend the Cornish Metals team for the outstanding progress that has been achieved at South Crofty with some very important milestones being met, in particular, the commissioning of the water treatment plant and the subsequent commencement of mine dewatering that is tracking ahead of expectations. This progress would not have been achieved without the support of suppliers, the community and other local stakeholders.
Looking ahead to 2024, we can look forward to another busy year. The continuation of dewatering at deeper levels will allow access to the mine for the first time in over 25 years. We remain focussed on our objective to complete the dewatering of South Crofty within 18 months from commencement.
The expected completion of the Feasibility Study will move South Crofty a stage further towards a construction decision. I also look forward to reporting on the results of the drill program at the Wide Formation which, if successful, will benefit the economics of South Crofty with the potential to increase production and extend the mine life.
The financial position of the Company remains healthy and we appreciate the continuing support and advice from our major shareholder, Vision Blue Resources."
Financial highlights for the nine months ended October 31, 2023 and October 31, 2022
Nine months ended (unaudited)
October 31, 2023
October 31, 2022
(Expressed in Canadian dollars)
Total operating expenses
$3,281,200
$2,616,299
Loss for the period
$1,571,831
$3,557,556
Net cash (used in) operating activities
$(1,761,034)
$(3,047,818)
Net cash (used in) investing activities
$(23,335,112)
$(5,760,776)
Net cash provided by (used in) financing activities
$(723)
$61,456,627
Cash at end of the period
$31,579,386
$57,840,129
Increase in operating costs impacted by higher insurance costs attributable to more site-based activities primarily relating to the construction of the WTP and related dewatering work;
Interest income of $1.5 million arising from increased interest rates being received on higher cash balance following the Offering;
Expenditure of $12.4 million incurred during the period on the construction of the WTP and related dewatering equipment, as well as new or replacement equipment for the mine;
Other project related costs of $8.4 million incurred during the period relating to the advancement of South Crofty to a potential construction decision, primarily for the metallurgical drill program and planning activities for dewatering and shaft re-access;
Costs of $0.8 million incurred for the continuation of the exploration program at Carn Brea which re-commenced in June 2023; and
Recognition of foreign currency translation gain of $1.6 million for those assets located in the UK when translated into Canadian dollars for presentational purposes.
Outlook
As described above, the proceeds raised from the Offering completed in May 2022 are being used to advance the South Crofty tin project to a potential construction decision within 30 months from closing of the Offering.
Within 30 months from the closing of the Offering, the Company's objectives are as follows:
Commence dewatering of the mine and thereafter complete the dewatering of the mine within 18 months;
Complete a Feasibility Study using all reasonable commercial efforts; and
Commence basic and detailed engineering studies, construction of the processing plant, refurbishment of underground facilities and other on-site early works.
The follow up exploration drill program at the Wide Formation target at Carn Brea South will also continue subject to the receipt of satisfactory drill results.
Subject to the availability of financing, consideration will also be given to continuing with the Company's exploration program at United Downs and evaluating other high potential, exploration targets within transport distance of the planned processing plant site at South Crofty.
ABOUT CORNISH METALS
Cornish Metals is a dual-listed company (AIM and TSX-V: CUSN) focused on advancing the South Crofty high-grade, underground tin Project through to a construction decision, as well as exploring its additional mineral rights, all located in Cornwall, United Kingdom.
South Crofty is a historical, high-grade, underground tin mine that started production in 1592 and continued operating until 1998 following over 400 years of continuous production;
The Project possesses Planning Permission for underground mining (valid to 2071), to construct new processing facilities and all necessary site infrastructure, and an Environmental Permit to dewater the mine;
South Crofty has the 4th highest grade tin Mineral Resource globally and benefits from existing mine infrastructure including multiple shafts that can be used for future operations;
Tin is a Critical Mineral as defined by the UK, USA, and Canadian governments, with approximately two-thirds of the tin mined today coming from China, Myanmar and Indonesia;
There is no primary tin production in Europe or North America;
Tin is an enabler of the energy transition - responsible sourcing of critical minerals and security of supply are key factors in the energy transition and technology growth;
South Crofty benefits from strong local community and regional and national government support.
Cornish Metals has a growing team of skilled people, local to Cornwall, and the Project could generate 250 - 300 direct jobs.
An updated Mineral Resource was completed in September 2023 with a 39% increase in tonnes and 32% increase in contained tin in the Indicated category for the Lower Mine (see news release dated September 13, 2023) as summarised below:
South Crofty Summary (JORC 2012) Mineral Resource Estimate
Area
Classification
Mass (kt)
Grade
Contained Tin / Tin Equivalent (kt)
Lower Mine
Indicated
2,896
1.50% Sn
43.6
Inferred
2,626
1.42% Sn
37.4
Upper Mine
Indicated
260
0.99% SnEq
2.6
Inferred
465
0.91% SnEq
4.2
The Mineral Resource Estimate for South Crofty is available in a report titled "South Crofty Tin Project - Mineral Resource Update NI 43-101 Technical Report", dated October 27, 2023, co-authored by Mr. N. Szebor (MCSM, MSc, BSc, CGeol, EurGeol, FGS) and Mr. R. Chesher (FAusIMM(CP), RPEQ, MTMS) of AMC Consultants, and can be accessed through the above link and on the Company's SEDAR+ page.
TECHNICAL INFORMATION
The technical information in this news release has been compiled by Mr. Owen Mihalop. Mr. Mihalop has reviewed and takes responsibility for the data and geological interpretation. Mr. Owen Mihalop (MCSM, BSc (Hons), MSc, FGS, MIMMM, CEng) is Chief Operating Officer for Cornish Metals Inc. and has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined under the JORC Code (2012) and as a Qualified Person under NI 43-101. Mr. Mihalop consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Caution regarding forward looking statements
This news release contains "forward-looking statements" including, but not limited to, statements in connection withthe expected use of proceeds of the Offering, including in respect of certain work programs, expected construction, including in respect of the WTP, and the potential completion of a Feasibility Study on the South Crofty mine and the timing thereof, the exploration program at United Downs and other exploration opportunities surrounding the South Crofty tin project, expected recruitment of various personnel, and expectations respecting tin pricing and other economic factors.Forward-looking statements, while based on management's best estimates and assumptions at the time such statements are made, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to receipt of regulatory approvals, risks related to general economic and market conditions; risks related to the COVID-19 global pandemic and any variants of COVID-19 which may arise; risks related to the availability of financing when required and on terms acceptable to the Company and the potential consequences if the Company fails to obtain any such financing, such as a potential disruption of the Company's exploration program(s); the timing and content of upcoming work programs; actual results of proposed exploration activities; possible variations in Mineral Resources or grade; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; changes in national and local government regulation of mining operations, tax rules and regulations.
Although Cornish Metals has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cornish Metals undertakes no obligation or responsibility to update forward-looking statements, except as required by law.
Market Abuse Regulation (MAR)Disclosure
The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited)
(Expressed in Canadian dollars)
October 31, 2023
January 31, 2023
ASSETS
Current
Cash
$
31,579,386
$
55,495,232
Marketable securities
2,636,751
2,718,936
Receivables
1,004,604
656,407
Prepaid expenses
314,331
371,977
35,535,072
59,242,552
Deposits
84,600
54,165
Property, plant and equipment
22,209,962
9,721,352
Exploration and evaluation assets
44,966,254
33,088,129
$
102,795,888
$
102,106,198
LIABILITIES
Current
Accounts payable and accrued liabilities
$
2,573,144
$
2,494,642
Lease liability
-
642
2,573,144
2,495,284
NSR liability
9,506,886
9,149,804
12,080,030
11,645,088
SHAREHOLDERS' EQUITY
Capital stock
128,394,652
128,377,152
Share subscriptions received in advance
-
17,500
Capital contribution
2,007,665
2,007,665
Share-based payment reserve
592,272
384,758
Foreign currency translation reserve
970,103
(648,962
)
Deficit
(41,248,834
)
(39,677,003
)
90,715,858
90,461,110
$
102,795,888
$
102,106,198
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Unaudited)
(Expressed in Canadian dollars)
Nine months ended
October 31, 2023
October 31, 2022
EXPENSES
Travel and marketing
$
488,797
$
399,321
Depreciation
-
443
Insurance
511,899
99,295
Office, miscellaneous and rent
148,925
74,615
Professional fees
794,167
500,737
Generative exploration expense
5,433
96,108
Regulatory and filing fees
73,171
144,468
Share-based compensation
130,136
-
Salaries, directors' fees and benefits
1,128,672
1,301,312
Total operating expenses
(3,281,200
)
(2,616,299
)
Interest income
1,456,697
136,216
Foreign exchange gain (loss)
394,980
(1,907,824
)
Gain on the disposal of royalty
-
318,147
Unrealized gain (loss) on marketable securities
(147,296
)
512,204
Loss before income taxes
(1,576,819
)
(3,557,556
)
Income tax recovery
4,988
-
Loss for the period
(1,571,831
)
(3,557,556
)
Foreign currency translation
1,619,065
(2,365,115
)
Total comprehensive income (loss) for the period
$
47,234
$
(5,922,671
)
Basic and diluted income (loss) per share
$
0.00
$
(0.01
)
Weighted average number of common shares outstanding:
535,268,881
430,111,396
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
(Expressed in Canadian dollars)
For the Nine months ended
October 31, 2023
October 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period
$
(1,571,831
)
$
(3,557,556
)
Items not involving cash:
Depreciation
-
443
Share-based compensation
130,136
-
Gain on the disposal of royalty
-
(318,147
)
Unrealized loss (gain) on marketable securities
147,296
(512,204
)
Foreign exchange loss (gain)
(394,980
)
1,907,824
Income tax recovery
(4,988
)
-
Income taxes paid
(11,012
)
-
Changes in non-cash working capital items:
Increase in receivables
(348,196
)
(565,408
)
Decrease in prepaid expenses
105,201
69,395
Increase (decrease) in accounts payable and accrued liabilities
187,340
(72,165
)
Net cash used in operating activities
(1,761,034
)
(3,047,818
)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment
(11,817,289
)
(1,569,968
)
Acquisition of exploration and evaluation assets
(11,489,073
)
(4,181,597
)
Increase in deposits
(28,750
)
(9,211
)
Net cash used in investing activities
(23,335,112
)
(5,760,776
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the Offering
-
65,135,746
Proceeds from option and warrant exercises
-
227,000
Share issue costs
-
(3,966,076
)
Proceeds from the disposal of royalty
-
63,147
Lease payments
(723
)
(3,190
)
Net cash provided by (used in) financing activities
(723
)
61,456,627
Impact of foreign exchange on cash
1,181,023
(1,730,608
)
Change in cash during the period
(23,915,846
)
50,917,425
Cash, beginning of the period
55,495,232
6,922,704
Cash, end of the period
$
31,579,386
$
57,840,129
Cash paid during the period for interest
$
-
$
-
Cash paid during the period for income taxes
$
11,012
$
-
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited) (Expressed in Canadian dollars)
Share
Foreign
Capital stock
subscriptions
Share-based
currency
Number of
received in
Capital
payment
translation
Shareholders'
shares
Amount
advance
contribution
reserve
reserve
Deficit
equity - total
Balance at January 31, 2022
285,850,157
$
56,846,350
$
-
$
2,007,665
$
630,265
$
(174,123)
$
(38,599,036)
$
20,711,121
Share issuance pursuant to the Offering
225,000,000
65,135,746
-
-
-
-
-
65,135,746
Share issue costs
-
(3,966,076)
-
-
-
-
-
(3,966,076)
Warrant exercises
900,000
87,000
25,000
-
-
-
-
112,000
Option exercises
575,000
115,000
-
-
-
-
-
115,000
Shares issued pursuant to property option agreement
